(Source: Business Wire)
SCBT Financial Corporation (NASDAQ: SCBT), the holding company for SCBT,
National Association, today released its unaudited results of operations
and other financial information for the three-month period ended
September 30, 2009. The Company produced solid results due primarily to
its net interest margin, noninterest income in mortgage banking and
continued good expense control.
Quarterly Cash Dividend
The Board of Directors of SCBT has declared a quarterly cash dividend of
$0.17 per share payable on its common stock. This per share amount is
equal to the dividend paid in the immediately preceding quarter and will
be payable on November 13, 2009 to shareholders of record as of November
6, 2009.
Third Quarter 2009 Results of Operations
Please refer to the accompanying tables for detailed comparative data
on results of operations and financial results.
The Company reported consolidated net income of $2.2 million, or $0.17
per diluted share for the three months ended September 30, 2009 compared
to consolidated net income of $124,000, or $0.01 per diluted share for
the third quarter of 2008, a $2.1 million increase. This increase was
primarily the result of the following items:
Net interest income increased by $1.7 million or 7.0%;
Increase in the provision for loan losses of $4.2 million or 151.0%;
Decrease in the amount of Other Than Temporary Impairment ("OTTI") of
$7.6 million;
$499,000 increase for the FDIC assessments; and
$2.1 million increase in OREO expenses and loan-related costs.
"I continue to be pleased with our overall performance," said Robert R.
Hill, Jr., President and CEO. "We are successfully navigating through
this environment with a good net interest margin, good expense control,
and strong core deposit growth. We are fortunate to attract very
talented bankers to our team and many new customer relationships.
However, we still have a lot of work to do with higher credit costs and
problem loans. The continued high level of credit costs and the OTTI
charge had a negative impact on our overall earnings."
During the third quarter of 2009, the Company's average total assets
increased by $39.1 million, a 1.4% increase over the third quarter of
2008. The growth in average total assets was supported by growth in
average total deposits of $78.3 million, an increase of 3.8% from the
third quarter of 2008. Average earning assets for the quarter increased
by $54.5 million, or 2.1%, compared to the third quarter of 2008.
The Company's annualized return on average assets (ROAA) for the third
quarter increased to 0.31% compared to 0.02% for the third quarter of
2008, but decreased from 0.77% for the second quarter of 2009. Total
average shareholders' equity at September 30, 2009 was $283.0 million,
an increase of $43.2 million, or 18.0% from December 31, 2008. This
increase was due to the issuance of 64,779 shares of Fixed Rate
Cumulative Preferred Stock, Series T, to the U.S. Treasury ("UST") in
January 2009 and the issuance of 1.356 million shares of common stock in
May 2009 which raised $29.2 million in new capital. Also, during the
second quarter of 2009, the Company redeemed the preferred stock for
$64.779 million and repurchased the common stock warrant from the UST
for $1.4 million. Annualized return on average equity (ROAE) for the
quarter was 3.04%, up from 0.22% for the third quarter of 2008.
Annualized return on average tangible equity (ROATE) for the third
quarter increased to 4.13% from 0.69% for the comparable period in the
prior year, but decreased from 9.43% in the second quarter of 2009.
Asset Quality
Annualized net charge-offs increased to 0.92% from 0.74% experienced in
the second quarter of 2009, and increased from 0.41% experienced in the
third quarter of 2008. During the third quarter, non-performing assets
(NPAs) as a percentage of loans and repossessed assets increased to
1.96% compared to 1.83% in the second quarter of 2009 and 0.66% one year
ago. NPAs to total assets at September 30, 2009 were 1.56% compared to
1.46% at the end of the second quarter of 2009 and 0.54% one year ago.
The increase in NPAs continues to reflect the pressure within the real
estate markets throughout our operating area and within the economy as a
whole. During the third quarter, the Company's other real estate owned
("OREO") decreased by $5.0 million from the prior quarter end, but
increased by $1.7 million from September 30, 2008. Nonaccrual loans
(including accruing loans past due 90 days or more) increased $7.3
million from the second quarter of 2009, and by $24.8 million from the
third quarter in 2008.
At September 30, 2009, nonperforming loans totaled $37.2 million,
representing 1.68% of period-end loans. OREO at the end of the third
quarter was $4.2 million, down from $6.1 million at December 31, 2008
and up from $2.5 million at the end of the third quarter of 2008. The
allowance for loan losses at September 30, 2009 was $34.3 million and
represented 1.55% of total period-end loans. The current allowance for
loan losses provides 0.92 times coverage of period-end nonperforming
loans, down from 1.08 times in the second quarter of 2009 and 2.36 times
at September 30, 2008. In the third quarter, net charge-offs were $5.1
million, or an annualized 0.92% of average loans compared to $4.2
million, or 0.74% the previous quarter and $2.3 million, or 0.41% one
year ago. The provision for loan losses was $7.0 million for the third
quarter of 2009 compared to $2.8 million for the comparable quarter one
year ago, and $4.5 million in the second quarter of 2009.
The Company's recorded balance of the four assets related to Silverton
was approximately $1.04 million at September 30, 2009. The FDIC was
named receiver of Silverton Bank on May 1, 2009. During the third
quarter, the Company charged-off two loan participations, (related to
Silverton Bank) which were acquired in purchase business combinations in
2007, totaling approximately $1.8 million. These assets have now been
valued at approximately twenty cents on the dollar. In addition, two
other loan participations have been moved to OREO. One loan was moved to
OREO at the end of the first quarter of 2009, and the other loan was
moved at the end of the second quarter of 2009. During the third
quarter, the Company wrote down the value of these properties by an
additional $810,000. Increased activity by the FDIC to dispose of these
assets and a known bid, along with the reduced prospect of collection
drove the additional charge-offs and write downs recorded by the Company
on these loans and OREO assets.
Loans and Deposits
The Company decreased total loans 3.1% since the third quarter of 2008,
driven by reductions in construction and land development loans of $73.7
million, commercial and industrial loans of $33.8 million, consumer non
real estate loans of $28.6 million and other loans of $24.8 million.
Offsetting the loan reductions has been loan growth in home equity loans
of $32.7 million, commercial owner occupied loans of $53.9 million and
other income producing property of $9.5 million. Total loans outstanding
were $2.2 billion at September 30, 2009 compared to $2.3 billion at
September 30, 2008. The balance of mortgage loans held for sale
increased $4.3 million from December 31, 2008 to $20.1 million at
September 30, 2009. During the first half of 2009, mortgage loans held
for sale increased sharply, as consumers took advantage of low interest
rates and refinanced their home mortgages. The balance of mortgage loans
held for sale at June 30, 2009 was $53.9 million. Since June 30, 2009,
we have seen a return to a more normal pipeline of refinancing activity,
and therefore a lower balance at September 30, 2009.
Total deposits decreased compared to the third quarter of 2008 by $11.6
million, or 0.54%. Certificates of deposit ("CDs") less than $100,000
and CDs more than $100,000 decreased by $196.1 million, which was mostly
offset by the other deposit categories. Given the decline in CD
balances, total deposits decreased by $53.2 million, or 9.8% annualized,
from the end of the second quarter of 2009. All categories of deposits
increased during the quarter except for CDs and NOW accounts as compared
to the previous quarter. The Company initiated a deposit campaign in
2009 to increase its core deposit base (excluding all CDs). The largest
growth on a year-to-date basis has occurred in money market accounts
with a $110.6 million increase, or 53.0% annualized; savings accounts
have grown $20.1 million, or 18.9% annualized; NOW accounts have grown
by $21.0 million, or 9.4% annualized; and demand deposits have grown by
$31.9 million, or 14.0% annualized. The Company continues to reduce
rates paid on CDs in order to manage its net interest margin within
favorable levels. The Company decreased brokered deposits since the end
of 2008 and held none of these at September 30, 2009, reflecting a
$110.0 million decrease. With the continued decline in loans outstanding
and the capital raised in May of 2009, the Company continued to maintain
a very strong capital and liquidity position at the end of the quarter.
In addition, over the last five months, the Company has increased its
correspondent relationships with a select group of smaller financial
institutions and thereby has increased significantly the liquidity and
funding sources for the Company. Funds for these correspondents, along
with the slow down in net loan growth, has increased the liquidity
position of the Company by more than $117 million at September 30, 2009
from the end of 2008.
Net Interest Income and Margin
Non-taxable equivalent net interest income (before provision for loan
losses) was $26.4 million for the third quarter of 2009, up 7.0% from
$24.7 million in the comparable period last year. Tax-equivalent net
interest margin increased 18 basis points from the third quarter of 2008
to 4.04%. Compared to the second quarter of 2009, tax-equivalent net
interest margin decreased 3 basis points. This decrease was the result
of earning approximately 25 basis points on excess Federal Reserve
Balances with an average balance of $104.0 million during the quarter.
Excluding both the average balances and the rate earned (25 basis
points) on these assets, the net interest margin would have been
approximately 4.19% for the quarter. With interest rates continuing at
low levels, the expectation of increased premium costs from the FDIC,
and ongoing slow loan demand, the Company has continued to aggressively
manage deposit pricing and funding sources during the third quarter of
2009. The Company continued to focus on increasing core deposits with
$52.2 million increase or 18.1%, on a link quarter basis, and has
allowed $106.0 million in certificates of deposit to run off during the
quarter. The increase in non-performing assets has partially offset the
positive impact of lower deposit costs.
The Company's average yield on interest-earning assets decreased 74
basis points while the average rate on interest-bearing liabilities
decreased 102 basis points from the third quarter of 2008. During the
third quarter of 2009, the Company's average total assets increased to
$2.8 billion, a 1.4% increase over the third quarter of 2008. The
increase was the result of the increase in average short-term
investments to $172.9 million, a $136.5 million increase from the third
quarter of 2008. All other average earning asset categories decreased
from the results of the third quarter of 2008. The decline in loan
volume and lower current market rates in combination with variable rate
loan resets resulted in the average yield on loans falling by 46 basis
points compared to the third quarter of 2008. Average investment
securities were $202.7 million at September 30, 2009, or 19.1% lower
than the balance in 2008. The growth in average total assets was
supported by growth in average total deposits of $78.3 million, an
increase of 3.8% from the third quarter of 2008.
Noninterest Income and Expense
Noninterest income was $5.6 million for the third quarter of 2009
compared to a $2.7 million loss for the third quarter of 2008, an
increase of $8.3 million. This increase reflects primarily an other than
temporary impairment ("OTTI") recorded during the third quarter of 2008
on Freddie Mac preferred securities of $9.8 million, compared to the
credit portion of an OTTI recorded on pooled trust preferred securities
of $2.2 million during the third quarter of 2009, and by a $944,000, or
186.2%, increase in mortgage banking income as the Company continued to
experience refinancing activity during the third quarter of 2009. Trust
and investment services income decreased $137,000, or 18.9%. Bankcard
services income remained flat compared to the same period one year ago,
and other income decreased by 28.8% due primarily to a reduction in
returns on bank owned life insurance.
Compared to the second quarter of 2009, noninterest income was down by
$2.2 million, primarily driven by the following decreases: (1) credit
portion of OTTI recorded on a pooled trust preferred securities of $2.2
million was $1.7 million more than the second quarter of 2009, and (2)
mortgage banking income was down by $683,000. These two decreases were
partially reduced by a $270,000 increase in service charges on deposit
accounts.
Noninterest expense was $21.8 million in the third quarter of 2009, a
14.1% increase or $2.7 million, compared to $19.1 million in the third
quarter of 2008. During the third quarter, the Company had increased
costs in three specific areas: (1) OREO expense and loan related costs
were higher by $2.1 million, (2) FDIC assessments were higher by
$499,000, and (3) salaries and employee benefits were higher by
$485,000. The Company managed the other expense categories to partially
offset these increases.
The Company's quarterly efficiency ratio increased to 63.5% compared to
60.9% in the second quarter of 2009, and 59.8% one year ago. For the
nine months ended September 30, 2009 and 2008, the efficiency ratio was
62.2% and 62.5%, respectively, reflecting a slight improvement.
"The Company's net interest margin remains strong as we continue to
manage through both the pressure on asset quality and the extremely low
interest rate environment. We continued to focus on the expense stream;
however, the costs related to loans, OREO and FDIC assessments continue
to out-pace the savings in all other expense categories," said John C.
Pollok, COO and CFO.
SCBT Financial Corporation, Columbia, South Carolina is a registered
bank holding company incorporated under the laws of South Carolina. The
Company consists of SCBT, N.A., the third largest bank headquartered in
South Carolina, and NCBT, a Division of SCBT, N.A. Providing financial
services for 75 years, SCBT Financial Corporation operates 49 financial
centers in 16 South Carolina counties and Mecklenburg County in North
Carolina. Named in Forbes as one of the 100 Most Trustworthy Companies
in America, SCBT Financial Corporation has assets of approximately $2.8
billion and its stock is traded under the symbol SCBT on the NASDAQ
Global Select Market. More information can be found at www.SCBTonline.com.
Cautionary Statement Regarding Forward Looking Statements
Statements included in this press release which are not historical in
nature are intended to be, and are hereby identified as, forward looking
statements for purposes of the safe harbor provided by Section 21E of
the Securities Exchange Act of 1934. SCBT Financial Corporation cautions
readers that forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
forecasted results. Such risks and uncertainties, include, among others,
the following possibilities: (1) credit risk associated with an
obligor's failure to meet the terms of any contract with the bank or
otherwise fail to perform as agreed; (2) interest risk involving the
effect of a change in interest rates on both the bank's earnings and the
market value of the portfolio equity; (3) liquidity risk affecting the
bank's ability to meet its obligations when they come due; (4) price
risk focusing on changes in market factors that may affect the value of
traded instruments in "mark-to-market" portfolios; (5) transaction risk
arising from problems with service or product delivery; (6) compliance
risk involving risk to earnings or capital resulting from violations of
or nonconformance with laws, rules, regulations, prescribed practices,
or ethical standards; (7) strategic risk resulting from adverse business
decisions or improper implementation of business decisions; (8)
reputation risk that adversely affects earnings or capital arising from
negative public opinion; (9) terrorist activities risk that results in
loss of consumer confidence and economic disruptions; (10) economic
downturn risk resulting in deterioration in the credit markets; (11)
greater than expected non-interest expenses; (12) excessive loan losses;
and (13) other factors, which could cause actual results to differ
materially from future results expressed or implied by such
forward-looking statements.
SCBT Financial Corporation(Unaudited)(Dollars in thousands, except per share data)
Third Quarter 2009 - 2008 % Change
Three Months Ended Nine Months EndedSeptember 30, YTD 2009 - 2008 % Change
September 30, 2009 June 30,2009 March 31,2009 December 31, 2008 September 30, 2008
EARNINGS SUMMARY (non tax equivalent) 2009 2008
Interest income $ 35,020 $ 35,857 $ 36,448 $ 38,094 $ 38,958 -10.1 % $ 107,325 $ 117,981 -9.0 %
Interest expense 8,639 9,838 11,450 13,450 14,301 -39.6 % 29,927 46,848 -36.1 %
Net interest income 26,381 26,019 24,998 24,644 24,657 7.0 % 77,398 71,133 8.8 %
Provision for loan losses (1) 6,990 4,521 5,043 4,374 2,785 151.0 % 16,554 6,362 160.2 %
Noninterest income 5,591 7,761 7,131 6,110 (2,693 ) -307.6 % 20,483 12,939 58.3 %
Noninterest expense 21,797 21,038 20,187 20,876 19,096 14.1 % 63,022 58,920 7.0 %
Income before provision for income taxes 3,185 8,221 6,899 5,504 83 3737.3 % 18,305 18,790 -2.6 %
Provision for income taxes 1,014 2,836 2,379 1,955 (41 ) -2573.2 % 6,229 6,554 -5.0 %
Net income 2,171 5,385 4,520 3,549 124 1650.8 % 12,076 12,236 -1.3 %
Preferred stock dividends -- 450 665 -- -- 1,115 --
Accretion on preferred stock discount -- 3,410 149 -- -- 3,559 --
Net income available to common shareholders $ 2,171 $ 1,525 $ 3,706 $ 3,549 $ 124 1650.8 % $ 7,402 $ 12,236 -39.5 %
Basic weighted-average common shares 12,546,654 11,826,972 11,179,869 10,846,219 10,121,168 24.0 % 11,873,728 10,110,583 17.4 %
Diluted weighted-average common shares 12,604,762 11,870,522 11,226,078 10,949,411 10,273,752 22.7 % 11,921,652 10,251,853 16.3 %
Earnings per common share - Basic $ 0.17 $ 0.13 $ 0.33 $ 0.33 $ 0.01 1600.0 % $ 0.62 $ 1.21 -48.8 %
Earnings per common share - Diluted 0.17 0.13 0.33 0.32 0.01 1600.0 % 0.62 1.19 -47.9 %
Cash dividends declared per common share $ 0.17 $ 0.17 $ 0.17 $ 0.17 $ 0.17 0.0 % $ 0.51 $ 0.51 0.0 %
Dividend payout ratio 141.59 % 52.02 % 54.24 % 1550.42 % 28.22 % 401.7 % 68.48 % 30.14 % 127.2 %
AVERAGE for Quarter Ended Quarter 2009 - 2008 % Change AVERAGE for Nine Months YTD 2009 - 2008 % Change
September 30, 2009 June 30, 2009 March 31, 2009 December 31, 2008 September 30, 2008 September 30, 2009 September 30, 2008
BALANCE SHEET HIGHLIGHTS
Loans held for sale $ 20,763 $ 48,132 $ 36,484 $ 10,684 $ 10,543 96.9 % $ 35,069 $ 19,149 83.1 %
Total loans (1) 2,221,078 2,268,292 2,307,322 2,304,911 2,265,606 -2.0 % 2,265,248 2,192,088 3.3 %
Total investment securities 202,692 199,293 213,849 232,446 250,395 -19.1 % 205,238 252,149 -18.6 %
Intangible assets 65,871 66,002 66,134 66,268 66,413 -0.8 % 66,002 65,911 0.1 %
Earning assets 2,617,386 2,587,286 2,643,376 2,560,387 2,562,877 2.1 % 2,622,402 2,511,369 4.4 %
Total assets 2,806,974 2,812,215 2,868,847 2,768,864 2,767,853 1.4 % 2,835,753 2,711,547 4.6 %
Noninterest-bearing deposits 334,165 321,038 316,978 315,841 326,298 2.4 % 324,123 314,940 2.9 %
Interest-bearing deposits 1,820,139 1,826,704 1,866,454 1,825,501 1,749,742 4.0 % 1,837,596 1,699,040 8.2 %
Total deposits 2,154,304 2,147,742 2,183,432 2,141,342 2,076,040 3.8 % 2,161,719 2,013,980 7.3 %
Federal funds purchased and repurchase agreements 229,806 197,636 203,391 190,409 295,137 -22.1 % 210,374 298,251 -29.5 %
Other borrowings 144,180 149,570 164,546 183,159 160,789 -10.3 % 152,691 163,772 -6.8 %
Shareholders' common equity (excludes preferred stock) 282,953 265,793 249,429 239,769 221,995 27.5 % 266,181 220,688 20.6 %
Shareholders' equity 282,953 298,849 300,497 239,769 221,995 27.5 % 294,035 220,688 33.2 %
ENDING Balance Quarter 2009 - 2008 % Change
September 30, 2009 June 30,2009 March 31,2009 December 31, 2008 September 30, 2008
BALANCE SHEET HIGHLIGHTS
Loans held for sale $ 20,077 $ 53,853 $ 43,603 $ 15,742 $ 11,419 75.8%
Total loans (1) 2,209,403 2,236,162 2,292,654 2,316,076 2,279,726 -3.1%
Total investment securities 212,228 191,415 204,032 222,227 238,961 -11.2%
Intangible assets 65,827 65,959 66,090 66,221 66,363 -0.8%
Allowance for loan losses (1) (34,297 ) (32,431 ) (32,094 ) (31,525 ) (29,199 ) 17.5%
Premises and equipment 72,523 73,404 73,606 66,392 64,056 13.2%
Total assets 2,776,684 2,807,309 2,839,584 2,766,710 2,766,745 0.4%
Noninterest-bearing deposits 335,565 322,270 315,727 303,689 313,700 7.0%
Interest-bearing deposits 1,791,554 1,858,096 1,836,141 1,849,585 1,825,027 -1.8%
Total deposits 2,127,119 2,180,366 2,151,868 2,153,274 2,138,727 -0.5%
Federal funds purchased and repurchase agreements 211,606 187,677 205,985 172,393 224,328 -5.7%
Other borrowings 144,048 144,430 152,799 177,477 172,738 -16.6%
Total liabilities 2,494,901 2,527,557 2,528,404 2,521,782 2,547,158 -2.1%
Shareholders' common equity (excludes preferred stock) 281,783 279,752 249,811 244,928 219,587 28.3%
Shareholders' equity 281,783 279,752 311,180 244,928 219,587 28.3%
Common shares issued and outstanding 12,712,476 12,696,849 11,319,644 11,250,603 10,225,776 24.3%
Quarter2009 - 2008% Change
September 30, 2009 June 30, 2009 March 31, 2009 December 31, 2008 September 30, 2008
NONPERFORMING ASSETS (ENDING balance)
Nonaccrual loans $ 36,605 $ 29,379 $ 20,730 $ 14,624 $ 11,564 216.5%
Other real estate owned ("OREO") 4,189 9,165 9,563 6,126 2,508 67.0%
Accruing loans past due 90 days or more 585 559 614 293 796 -26.5%
Other nonperforming assets 13 -- 40 84 172 -92.4%
Restructured loans 1,974 1,951 -- -- --
Total nonperforming assets $ 43,366 $ 41,054 $ 30,947 $ 21,127 $ 15,040 188.3%
Total nonperforming assets as a percentage of total loans and repossessed assets (1)(2) 1.96 % 1.83 % 1.34 % 0.91 % 0.66 %
Total nonperforming assets as a percentage of total assets 1.56 % 1.46 % 1.09 % 0.76 % 0.54 %
NPLs as a percentage of period end loans 1.68 % 1.34 % 0.93 % 0.64 % 0.54 %
Quarter Ended Quarter 2009 - 2008 % Change Nine Months Ended YTD 2009 - 2008 % Change
September 30, 2009 June 30,2009 March 31,2009 December 31, 2008 September 30, 2008 September 30, 2009 September 30, 2008
ALLOWANCE FOR LOAN LOSSES (1)
Balance at beginning of period $ 32,431 $ 32,094 $ 31,525 $ 29,199 $ 28,760 12.8 % $ 31,525 $ 26,570 18.6 %
Loans charged off (5,103 ) (4,295 ) (4,779 ) (1,980 ) (2,356 ) 116.6 % (14,176 ) (3,741 ) 278.9 %
Overdrafts charged off (271 ) (230 ) (214 ) (299 ) (234 ) 15.9 % (715 ) (733 ) -2.5 %
Loan recoveries 195 262 390 121 182 7.1 % 847 471 79.8 %
Overdraft recoveries 55 79 129 110 62 -11.3 % 262 270 -3.0 %
Net charge-offs (5,124 ) (4,184 ) (4,474 ) (2,048 ) (2,346 ) 118.4 % (13,782 ) (3,733 ) 269.2 %
Provision for loan losses 6,990 4,521 5,043 4,374 2,785 151.0 % 16,554 6,362 160.2 %
Balance at end of period $ 34,297 $ 32,431 $ 32,094 $ 31,525 $ 29,199 17.5 % $ 34,297 $ 29,199 17.5 %
Allowance for loan losses as a percentage of total loans (1)
1.55 % 1.45 % 1.40 % 1.36 % 1.28 % 1.55 % 1.28 %
Allowance for loan losses as a percentage of nonperforming loans
92.22 % 108.33 % 150.37 % 211.34 % 236.23 % 92.22 % 236.23 %
Net charge-offs as a percentage of average loans (annualized) (1)
0.92 % 0.74 % 0.79 % 0.35 % 0.41 % 0.81 % 0.23 %
Provision for loan losses as a percentage of average total loans (annualized) (1) 1.25 % 0.80 % 0.89 % 0.75 % 0.49 % 0.98 % 0.39 %
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SCBT Financial Corporation(Unaudited)(Dollars in thousands, except per share data)
September 30, 2009 December 31,2008 September 30, 2008
LOAN PORTFOLIO (ENDING balance) (1) % of Total % of Total % of Total
Commercial real estate:
Construction and land development $ 484,540 22.0 % $ 535,638 23.1 % $ 558,261 24.4 %
Commercial non-owner occupied 311,903 14.1 % 330,792 14.3 % 313,637 13.8 %
Total commercial real estate 796,443 36.1 % 866,430 37.4 % 871,898 38.2 %
A service of YellowBrix, Inc.
